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By: Wee Teck Loo

Sales of smartphones are projected to exceed 1.3 billion units in 2015. The explosive sales of smartphones are also driving sales of accordant headphones and wireless speakers. 26% of the respondents paid between US$20-50 for their wireless speakers and almost the same number of respondents paid between US$75-200.  In fact, the survey showed that a significant number of respondents were willing to pay a premium, with more than 10% paying more than US$200 for their wireless speakers.

Wireless Speakers Spending

Wireless-Speaker

Source: Euromonitor International Analyst Survey – Analyst Pulse; May 2015

Note: Question shown to respondents who owned wireless speakers

The converts

Portability (68%) and interoperability with other devices (53%) were cited as the key reasons why respondents purchased wireless speakers. Poor audio quality of their phones is only ranked fourth at 32%, behind ease of use (47%). HTC has placed considerable emphasis on its front-firing speakers on its smartphone range and based on the results of the wireless speakers’ survey, most users do not find the audio quality of their smartphones a key complaint. It is also probable that users are using headphones or earphones with their smartphones and thus, do not use the phone’s speakers much.

What converts want

For respondents who owned wireless speakers, portable and convenience ranked important, with battery life also featuring high on the survey. While most respondents did not cite wireless speaker set-up (pairing) as an issue, most respondents replied with agree (rather than strongly agree), indicating that manufacturers still need to work on the set-up process. aptX (a codec that reduces  bit rate while achieving significant bit rate efficiencies and preserving audio quality) is unable to command a premium. Smartphone manufacturers like HTC, LG and Samsung are supporting aptX codec on their flagship smartphones, and based on the survey, manufacturers might as well save the money on aptX licensing. While aptX could be offered license-free in a bid to promote the codec’s popularity, manufacturers need to learn to be disciplined and avoid adding too many features and functions, and risk confusing consumers.

Level of Agreement

Speaker-Agreement

Source: Euromonitor International Analyst Survey – Analyst Pulse; May 2015

Note: Question shown to respondents who owned wireless speakers

Selling to the doubters

For respondents who do not have wireless speakers, more than two thirds indicated that they have no intention to purchase them within the next six months.  These respondents are either not interested or do not see the need to purchase. The challenge for the manufacturers is to convince or entice the doubters. A more in-depth study is needed to understand their usage behaviour of smartphones, but these consumers may not be listening to music (and even if they do, they might not use earphones) and could be watching films alone, and therefore do not see the need for speakers.

For respondents who express an interest in wireless speakers, audio quality and price are key considerations. In order to achieve good quality audio, manufacturers will need higher-priced speaker drivers and better quality components, which will inevitably drive cost and price upwards.  Interestingly, respondents who do not have wireless speakers do not rate portability high, unlike current wireless speaker owners.

Two different markets

Essentially, manufacturers are faced with two polarising markets – one for existing wireless speaker owners who are willing to pay for portability and interoperability, and one for first timers who are more price-sensitive. First timer buyers have indicated their willingness to compromise on design and size, and manufacturers can redirect the savings on design to improve on audio quality, without sacrificing audio quality. Manufacturers may want to consider accepting razor-thin profit margins on wireless speakers tailored for first timers to hook them to the brand. Once these consumers become convinced of the convenience and portability of wireless speakers, these consumers will be willing to upgrade to more expensive (and higher margin) models.

 

 

More on the sample: Our global analyst network

Analyst Pulse survey results differ from other survey data cited on Passport Survey (eg findings from the Global Consumer Trends or Global Youth surveys) and should be interpreted accordingly. Analyst Pulse responses reflect the opinions and habits of several hundred of Euromonitor International’s in-country analysts and in-house researchers around the world.  As such, results reflect a great degree of geographic, economic and cultural diversity among educated consumers. 

On the other hand, Euromonitor International’s researchers do not constitute a random sample of consumers in a given country or across the globe, so their responses do not necessarily represent the opinions of a broader population of consumers. Passport Survey presents their attitudes and behaviours in order to provide starting points for potential further investigations and sparks of tactical insight.

 

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